Harris escalates her courtship of crypto

During a fundraiser on Sunday, Harris pledged support for digital tokens that the Biden administration has sought to rein in, and reiterated it three days later.

“I will recommit the nation to global leadership in the sectors that will define the next century,” Harris said Wednesday, listing “blockchain” as a specific priority for her.

“We will encourage innovative technologies like AI and digital assets while protecting consumers and investors,” she said over the weekend. “We will create a safe business environment with consistent and transparent rules of the road.”

Crypto backers are particularly hopeful that Harris, if elected, would end what they call a siege spearheaded by Securities and Exchange Commission Chair Gary Gensler. Last year, the SEC brought 46 crypto-related enforcement actions — a new high — including against industry behemoth Coinbase alleging it violated the law by not registering with the government as a broker. Gensler also publicly opposed an industry-backed House GOP bill on crypto that passed earlier this year.

Nelson brings his own potentially crypto-averse background to his work for Harris; he served as a Biden administration Treasury official as the department proposed to tighten scrutiny of certain crypto assets’ potential misuse for money laundering.

On the Hill, however, Democrats were already starting to follow the lead of Harris’ team by building ties to the crypto sector, a $2 trillion industry with a historic libertarian streak. Senate Majority Leader Chuck Schumer, D-N.Y., joined a Crypto4Harris town hall last month and talked up the prospect of action in his chamber of Congress on industry issues before 2025.

Yet Schumer’s optimism is likely misplaced; Senate Agriculture Committee Chair Debbie Stabenow, D-Mich., told Semafor she still hasn’t managed to draw a GOP backer for her plan to hand the Commodity Futures and Trading Commission more jurisdiction over digital assets.

And Harris still isn’t seen as favorable to the industry as Trump, who has publicly vowed to fire Gensler if elected.

“They’re trying to figure out what the right place for her to be is,” said Blockchain Association CEO Kristin Smith, who has spoken with Harris’ team. “In a perfect world, we would want to see something a little bit more fleshed out.”

No matter who’s president next year, though, a crypto regulatory battle is likely to take place in Congress. Anticipating that possibility, crypto companies have spent at least $119 million in the 2024 election, pumping it into super PACs backing pro-crypto candidates, according to the nonprofit watchdog Public Citizen.

“I have no problem with people buying and selling crypto,” Massachusetts Democratic Sen. Elizabeth Warren, perhaps crypto’s most prominent skeptic in Congress, told Semafor.

“We need to make sure we have curbs in place, like we do in every other part of our financial system, so that crypto can’t be used by terrorists, drug traffickers and rogue nations,” she added.

Harris has carefully chosen just a few policy areas to distinguish herself from Biden, and it’s notable that crypto is one of them. She’s now reiterated her support for the digital asset community at least twice in public, bringing on Cuban and former Trump aide Anthony Scaramucci to informally advise her campaign on crypto.

The campaign-cash onslaught unleashed by the crypto industry makes it an attractive sector to court, at least as a possible insurance policy against it spending heavily against her.

But friendliness during campaign season doesn’t always translate into the same approach after an election – so her stance on Stabenow’s regulatory proposal may be a better gauge of her crypto attitudes than any private meetings or speeches.

Rep. Brad Sherman, D-Calif., argues the crypto sector’s influence over Harris will be short-lived and limited to the 2024 campaign. He said he’s also spoken with Harris’ team.

He argued that Harris wouldn’t dial back regulations and would “stand firm” on rules to prevent money laundering, as well as to compel crypto platforms to verify customers’ identities.

“This is a political season. The crypto people are flashing huge amounts of money,” Sherman told Semafor. “We know they’re playing big. If that means they get a meeting, they get a meeting.”